A. Rose et al., Long-run implications for developing countries of joint implementation of greenhouse gas mitigation, ENVIRON R E, 14(1), 1999, pp. 19-31
Joint Implementation (JI) calls for cooperation between industrialized and
developing countries in the mitigation of greenhouse gas (GHG) emissions. H
owever, a major concern of potential host countries is that, if they utiliz
e their low-cost options for JI now, they will be left with only high cost
options in the future, thereby penalizing them at a time when they may be o
bligated to mitigate GHGs themselves. This paper formalizes this hypothesis
by utilizing an optimal control framework analogous to the Hotelling model
of non-renewable resource extraction. The results are that cumulative abat
ement effects can impose costs on the future, but that they can be offset b
y technological change, market power, or compensation.